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explo

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Thursday, April 18th 2013, 1:33am

Half a billion lost in Q4

Equity now negative 465m. Can we say they blew it and blew up by now?
http://investor.ldksolar.com/phoenix.zht…7993&highlight=

Klothilde

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Thursday, April 18th 2013, 2:03am

I don't understand how you can default on a bond payment and not start insolvency proceedings? In Germany it's not possible, one thing triggers the other. Anybody knows how the chinese law works and if insolvency can be avoided?

Pop2mollys

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Thursday, April 18th 2013, 2:04am

Time to die....


STP nothing but 600MW left, Solarworld and LDK on deathbed.....

Encouraging we are on road to recovery.... And it's happening quickly....

This post has been edited 1 times, last edit by "Pop2mollys" (Apr 18th 2013, 3:03am)


solarcat

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Thursday, April 18th 2013, 3:01am

LDK Q1'2013 guidance $80-100mil sales, and 30-40MW modules. Renesola will do 3x more in sales and 10x more in modules, has positive equity, positive margins and positive cash flow. Yet LDK has higher market cap. That is insane!

explo

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Thursday, April 18th 2013, 3:21am

I don't understand either. How can the company have negative equity (almost half a billion!) without authorities appointing a BK lawyer to protect the claims of employees, suppliers etc.? In my world, once the equity is gone you owe more than you have and thus blew it and a lawyer takes control of your assets to distribute creditors' claims lawfully. Of course in this distribution shareholders' always gets nothing except the freedom to not have to pay the company's liabilities. Let's see how it trades. Stocks trading on U.S. exchanges do not seem very value focused anyway. Book value per share -3 USD..

sony1

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Thursday, April 18th 2013, 6:54am

Lol from CC. They want to ramp up module and wafer production to 80%. This is just crazy

pg6solar

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Thursday, April 18th 2013, 7:02am

Lol from CC. They want to ramp up module and wafer production to 80%. This is just crazy
They can dream all they want. They're also looking for potential investors who understand "our potential capacity". They sold me on that potential from mid 2010 into spring of 2011. Thanks, but no more.

littleguyintucson

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Thursday, April 18th 2013, 7:18am

Based on ER they missed guidance on revenues by $100-$150M. This level of miss based on the Q4 guidance must means several projects did not sell. These I would speculate were in China and were taken over by the financing arms that were building them. All speculative but they did have several projects of size in China. From the con call, they have very limited project sales in the next several quarters and the ones that were mentioned were oversees.

A good measuring stick was the wafer per piece at $0.95-$1 per piece. That places ASP at 4.2W per piece around $0.23-$0.25 or flat and inline with most major reporting sites.(for those interested in SOL)

LDK revenue guidance is less than operational expenses and interest. I can not fathom a local entity wanting to invest in the company. I could see, more assets being sold off.


What is clear to me is the capacity is being given to the debt holders and friends to operate and it will not go away. When the Mahong facility is close to operations, you may expect that this too will be given to those that are friends. I believe that is what Jack means about investors that understand their capacity potentials.

That is all not relevant now as equity is negative and heading more negative for shareholders with no potential to get positive from operations in the next several years.

odyd12

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Thursday, April 18th 2013, 7:19am

I don't understand either. How can the company have negative equity (almost half a billion!) without authorities appointing a BK lawyer to protect the claims of employees, suppliers etc.? In my world, once the equity is gone you owe more than you have and thus blew it and a lawyer takes control of your assets to distribute creditors' claims lawfully. Of course in this distribution shareholders' always gets nothing except the freedom to not have to pay the company's liabilities. Let's see how it trades. Stocks trading on U.S. exchanges do not seem very value focused anyway. Book value per share -3 USD..
I could be completely off but negative shareholders equity indicates zero earnings from the business and no stock value for original offerings. While it is indicative to company in huge distress, it is also a balance sheet of organization which is under huge market stress and sure should be consider a risk for a conservative investor.
I just want to point out that CSUN as you know have negative equity, and with next three quarters more companies may have the same condition. I am seeing a lot of disapproval for LDK, I am curious if the group will feel the same when more favorite corporations will join this condition.

Klothilde

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Thursday, April 18th 2013, 8:12am

I could be completely off but negative shareholders equity indicates zero earnings from the business and no stock value for original offerings. While it is indicative to company in huge distress, it is also a balance sheet of organization which is under huge market stress and sure should be consider a risk for a conservative investor.
I just want to point out that CSUN as you know have negative equity, and with next three quarters more companies may have the same condition. I am seeing a lot of disapproval for LDK, I am curious if the group will feel the same when more favorite corporations will join this condition.


Negative equity means that shareholders have lost their claim on company assets. Should debt be restructured through insolvency shareholders will be wiped out instantly. And since debt covenants have been breached left and right it is completely up to the banks when to let the companies go bust. This risk scares away not only the conservative investors but also the crazy ones.

That's why I am focusing on comps with prudent and serious management who seriously care about shareholder value and who never let the company come close to the death spiral described above, namely TSL and JASO.

odyd12

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Thursday, April 18th 2013, 8:19am

Sure but for the next three quarters we will see further erosion of equity, simply due to losses?
Any concern on this, or does it matter?

explo

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Thursday, April 18th 2013, 11:27am

I don't understand how a stock can trade like this. It's like deer in headlights. No one sells. Close their eyes and hope it is not real or will go away. They need to issue billions of shares just to restructure to financial health after this.

uchsteve

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Thursday, April 18th 2013, 11:31am

I wonder if the hope of a credit line is a factor ...

http://www.bloomberg.com/news/2013-04-18…-estimates.html

explo

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Thursday, April 18th 2013, 11:45am

Sure but for the next three quarters we will see further erosion of equity, simply due to losses?
Any concern on this, or does it matter?
Exactly, that's why everyone are looking at who's bleeding least (SOL and CSIQ) and who has most left to bleed (TSL and JASO).

For solar 11 cash means nothing to me. Cash availability depends on ability to roll over short-term debt. Ability to roll over short-term debt depends on debt ratio, which depends on equity left. So those that can conserve equity will get the cash they need.

Klothilde

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Thursday, April 18th 2013, 11:48am

$320M in new credit. Nice!

solarfun

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Thursday, April 18th 2013, 12:08pm

My guess is that there is a voluntarily bankruptcy and involuntarily bankruptcy. It looks like LDK is not going to start BK proceedings themselves. So it is up to the bondholders (the defaulted ones), if they want to, to put LDK out of its misery and start the BK process.

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